Intel may have itself to blame

Intel is known for its competitive nature. And it's the nastier part of the company's character that's being, once again, called sharply to account.

By
Dan Gillmor, Computerworld
| Aug 01, 2005

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Intel isn't the world's biggest maker of microprocessors for nothing. Among manufacturing companies, it surely ranks among the most adept, and it has a long history of innovation.

But Intel is also known for its competitive nature -- a rough and sometimes mean style that has always come close to the edge of what's acceptable. And it's the nastier part of the company's character that's being, once again, called sharply to account.

The latest questions or, more accurately, accusations have surfaced in the form of a lawsuit recently filed by AMD, Intel's chief competitor. I've read the complaint, and this is serious stuff.

AMD is alleging a host of offences, but the case boils down to whether Intel has used illegal or merely nasty tactics to maintain its chip dominance. If the allegations of illegal behaviour are true -- and, needless to say, Intel has denied them -- Intel may be in some real trouble this time.

There are some high stakes in this battle, and not just for Intel. The stakes for IT are real too. If AMD prevails, computer buyers will see more choices and lower prices.

Which is not to say that price-cutting and innovation haven't been occurring in the Intel architecture. Largely thanks to AMD, both have occurred. AMD's 64-bit migration strategy -- helping customers by ensuring that 32-bit applications would keep working -- and dual-core processors have been examples of the kind of leadership for which Intel was once more famous.

Intel isn't a stranger to anti-trust issues. In the 1990s, it stayed pretty much above the fray as Microsoft, its partner in the Wintel alliance, faced a series of harsh charges. Intel had schooled its workers to avoid saying and doing the kinds of things that got Microsoft in such trouble.

Indeed, people I talked with at Intel during the epic Microsoft trial were baffled that the software giant seemed not only to have no serious internal policies to avoid such trouble, but also that Microsoft executives were so flagrantly dismissive of government officials and their duties.

Intel's sensitivity had shone through in another way. At one point, the company backed away from what seemed to be a push to dominate the motherboard market as it had done with chips. I had always assumed that Intel, already immensely profitable and powerful, had done this largely to avoid any antitrust complications.

Microsoft, in the end, avoided serious sanctions for its behaviour. The Bush administration, in its odious deal with the software company, all but announced that monopolists could get away with just about anything on its watch. I wonder if Intel concluded that it, too, now had a free pass. If so, the chip maker may have made a mistake.

Anti-trust law is evolving at a fairly rapid pace these days, and there are legitimate questions about whether it's appropriate in a fast-moving industry like technology. I believe it is, but there's at least a solid intellectual argument that hard-nosed enforcement may deter innovation.

I believe Intel would be better off if it acted as if strong enforcement was going to occur no matter what. Tough but honourable competition, not knife fights, should be the heartbeat of capitalism.